SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter comes before this Court pursuant to S.C. Code Ann. § 61-2-260 (Supp. 2005), S.C. Code Ann. § 1-23-600(B) (Supp. 2005), and S.C. Code Ann. §§ 1-23-310 et seq. (2005) for a contested case hearing. Petitioner South Carolina Department of Revenue (Department) contends that Respondent Cherokee Trail (Cherokee Trail) knowingly permitted an underage individual to purchase beer from its convenience store, Cherokee Trail Outdoor Center, at 700 West Greenwood Street in Abbeville, South Carolina, in violation of 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2005). For this fourth violation against its off-premises beer and wine permit within three years, the Department seeks to revoke Cherokee Trail’s permit for the location in question. In response, Cherokee Trail concedes that the alleged violation did occur, but further contends that the proposed penalty for the violation is excessive in light of its efforts to prevent such sales.

After timely notice to the parties, a hearing of this matter was held on April 4, 2006, at the South Carolina Administrative Law Court in Columbia, South Carolina. Based upon the testimony and exhibits presented at the hearing, I find that the appropriate penalty for Cherokee Trail’s violation is a forty-five-day suspension of its off-premises beer and wine permit.

STIPULATED FACTS

Pursuant to ALC Rule 25(C), the parties submitted Stipulations of fact to the Court at the hearing of this matter. These Stipulations were marked as Petitioner’s Exhibit #1 and are hereby incorporated into this Order by reference. In the seven Stipulations, the parties describe the circumstances giving rise to the violation in question and acknowledge both the current and prior violations committed by Cherokee Trail.

Specifically, the parties stipulated that, on August 9, 2005, at the Cherokee Trail Outdoor Center at 700 West Greenwood Street in Abbeville, South Carolina, Mary Boyd Norman, an employee of Respondent Cherokee Trail, sold a beer to a youthful-looking nineteen-year-old Underage Cooperating Individual (UCI), who was working with agents of the South Carolina Law Enforcement Division (SLED). The parties further stipulated that Ms. Norman did not request identification from the UCI prior to completing the sale of the beer. Beyond describing the incident, the parties also agreed that, as a result of this sale, Cherokee Trail, through its employee, Ms. Norman, permitted the sale of beer to an underage individual in violation of 23 S.C. Code Ann. Regs. 7-200.4, and that this violation was Cherokee Trail’s fourth violation against its beer and wine permit within the past three years. As stipulated by the parties, these prior violations include: (1) a May 16, 2003 violation for selling beer to an underage individual for which Cherokee Trail paid a $400 fine, (2) an August 28, 2003 violation for permitting gambling on the premises for which Cherokee Trail paid an $800 fine, and (3) a January 30, 2004 violation for selling beer to an underage individual for which Cherokee Trail’s permit was suspended for forty-five days.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. Cherokee Trail is a partnership that operates the Cherokee Trail Outdoor Center, a convenience store, grill, and hunting and fishing gear supply store located at 700 West Greenwood Street in Abbeville, South Carolina. Cherokee Trail holds a permit to sell beer and wine for off-premises consumption from its store.

2. Cherokee Trail has made good-faith efforts to prevent the sale of alcoholic beverages to underage individuals. It provides training on the sale of alcoholic beverages to its employees, both at the time of hire and in regular staff meetings, and uses a “Ruby” cash register system that requires proof of age for all purchases of beer and wine.

3. At the hearing of this case, Robert Bowie, one of the owners of Cherokee Trail, testified to the circumstances surrounding the instant violation. He explained that the sale was completed by the store’s cook, who had not been trained as a cashier and who had only made the sale in an attempt to assist the store’s other employees, who were involved in restocking the store at the time of the sale. The cook had not been trained in how to make alcohol sales and rang the beer up as a grocery item, thereby bypassing the proof-of-age requirement on the cash register. As a result of making the improper sale, the cook was fired from Cherokee Trail.

4. Mr. Bowie also testified that he would be willing secure alcoholic beverage training for his employees under a Department-recognized training program.

CONCLUSIONS OF LAW

Based upon the foregoing Stipulated Facts and Findings of Fact, I conclude the following as a matter of law:

1. The Department is charged with the responsibility of administering and enforcing the laws and regulations governing alcoholic beverages, including beer and wine. S.C. Code Ann. § 61-2-20 (Supp. 2005).

2. Regulation 7-200.4 prohibits holders of beer and wine permits from selling beer or wine to persons under twenty-one years of age. The regulation provides that:

To permit or knowingly allow a person under twenty-one year[s] of age to purchase or possess or consume alcoholic liquors, beer or wine in or on a licensed place of business which holds a license or permit issued by the Department is prohibited and constitutes a violation against the license or permit. Such violation shall be sufficient cause to suspend or revoke the license or permit by the Department.

23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2005). Respondent Cherokee Trail concedes and stipulates that it committed a violation of Regulation 7-200.4 as alleged by the Department.

3. The Department has jurisdiction to revoke or suspend permits authorizing the sale of beer and wine. S.C. Code Ann. § 61-4-590 (Supp. 2005). Pursuant to such authority, the Department may suspend or revoke a beer and wine permit if the permittee has knowingly sold beer or wine to a person under twenty-one years of age. S.C. Code Ann. § 61-4-580(1) (Supp. 2005); 23 S.C. Code Ann. Regs. 7-200.4 (Supp. 2005); see also S.C. Code Ann. § 61-4-270 (Supp. 2005) (authorizing the Department to “revoke the permit of a person failing to comply with any requirements” in Chapter 4 of Title 61). Further, the Department may exercise this authority to suspend or revoke a permit for a first violation of the prohibition against selling beer and wine to minors. See S.C. Code Ann. §§ 61-4-270, 61-4-580, 61-4-590; 23 S.C. Code Ann. Regs. 7-200.4. In lieu of such suspension or revocation, the Department may also impose a monetary penalty upon a permittee for selling beer and wine to minors. S.C. Code Ann. § 61-4-250 (Supp. 2005). For retail beer and wine permittees, this monetary penalty must be no less than $25 and no greater than $1,000. Id.

4. S.C. Revenue Procedure 04-4 (2004) sets forth the Department’s penalty guidelines for violations of the alcoholic beverage control laws. For retail beer and wine permits, Revenue Procedure 04-4 provides for a $500 fine for the first violation by a permittee, a $1000 fine for the second violation, a forty-five-day suspension of the permit for the third violation, and revocation of the permit for the fourth violation. However, this document does not set binding norms for the Department, but rather only provides guidance to the Department in assessing penalties for violations of the alcoholic beverage control laws. See Revenue Procedure 04-4, at 2 (“These are guidelines only and this advisory opinion does not establish a binding norm.”). As such, Revenue Procedure 04-4 is not law and thus is not binding upon this Court. Cf. Home Health Serv., Inc. v. S.C. Tax Comm’n, 312 S.C. 324, 328, 440 S.E.2d 375, 378 (1994) (holding that “whether a particular agency proceeding announces a rule or a general policy statement depends upon whether the agency action establishes a binding norm”) (citing Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369 (11th Cir. 1983)).

5. The weight and credibility assigned to evidence presented at the hearing of a matter is within the province of the trier of fact. See S.C. Cable Television Ass’n v. S. Bell Tel. & Tel. Co., 308 S.C. 216, 222, 417 S.E.2d 586, 589 (1992); see also Doe v. Doe, 324 S.C. 492, 502, 478 S.E.2d 854, 859 (Ct. App. 1996) (holding that a trial judge, when acting as finder of fact, “has the authority to determine the weight and credibility of the evidence before him”). Furthermore, a trial judge who observes a witness is in the best position to judge the witness’s demeanor and veracity and to evaluate the credibility of his testimony. See, e.g., Woodall v. Woodall, 322 S.C. 7, 10, 471 S.E.2d 154, 157 (1996); Wallace v. Milliken & Co., 300 S.C. 553, 556, 389 S.E.2d 448, 450 (Ct. App. 1990).

6. The facts in this case warrant a lesser penalty than that sought to be imposed by the Department. It is a generally recognized principle of administrative law that the fact finder has the authority to determine an appropriate administrative penalty, within the statutory limits established by the legislature, after the parties have had an opportunity for a hearing on the issues. See, e.g., Walker v. S.C. Alcoholic Beverage Control Comm’n, 305 S.C. 209, 407 S.E.2d 633 (1991). Further, in assessing a penalty, the finder of fact “should give effect to the major purpose of a civil penalty–deterrence.” Midlands Utility, Inc. v. S.C. Dep’t of Health & Envtl. Control, 313 S.C. 210, 212, 437 S.E.2d 120, 121 (Ct. App. 1993).

7. However, Respondent should be reminded that the purpose of the statutory prohibition against selling alcohol to underage individuals is to protect both the underage individuals and the public at large from the possible adverse consequences of such sales. The sale of alcohol to an underage individual is a serious offense and cannot be taken lightly. Further, it should be noted that a permit to sell beer and wine is neither a contract nor a property right. Rather, it is merely a permit to do what otherwise would be unlawful to do, and to be enjoyed only so long as the restrictions and conditions governing its continuance are complied with. Feldman v. S.C. Tax Comm’n, 203 S.C. 49, 26 S.E.2d 22 (1943). Accordingly, beyond satisfying the penalty imposed in this matter, Respondent is advised to make every effort to prevent such sales in the future, as the failure to do so may subject it to more severe penalties in the event of a future violation.

ORDER

Based upon the Stipulated Facts, Findings of Fact, and Conclusions of Law stated above,

IT IS HEREBY ORDERED that, for Respondent’s fourth violation against its beer and wine permit within three years, the Department shall SUSPEND Respondent’s off-premises beer and wine permit for its Cherokee Trail Outdoor Center located at 700 West Greenwood Street in Abbeville, South Carolina, for a period of forty-five (45) days.

IT IS FURTHER ORDERED that, within sixty (60) days of the date of this Order, Respondent must secure training for its employees in sales of alcoholic beverages under one of the training programs recognized by the Department. See S.C. Information Letter 06-5 (2006) (listing five recognized training programs for alcoholic beverage sales).

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731

April 17, 2006

Columbia, South Carolina